Brand Loyalty – A Brand Bulding Concept


Brand loyalty is the ultimate goal a company sets for a branded product. A company’s main question in relation to selling their products or services use do be: “How do I get people to buy my product?” Nowadays companies still greatly appreciate the answer to this question but they have also realized that getting customers is not the only thing they need to do. In today’s rapidly moving world consumers don’t stick with products for life.

Advertisements and an increased feeling of independence have created consumers that will switch brands or products as soon as the feel the need to do so. What company’s look for in this consumer environment is creating a so-called brand loyalty?

Brand loyalty is a consumer’s preference to buy a particular brand in a product category. It occurs because consumers perceive that the brand offers the right product features, images, or level of quality at the right price. This perception becomes the foundation for a new buying habit. Consumers initially will make a trial purchase of the brand and, after satisfaction, tend to form habits and continue purchasing the same brand because the product is safe and familiar

Brand loyalists have the following mindsets:

  • I am committed to this brand.
  • I am willing to pay a higher price for this brand over other brands.
  • I will recommend this brand to others.

Loyalty Segmentation:

Loyalty segmentation helps in building strong brands. A market can usually be divided into the following groups:

  • Non customers: Those who use the competitor’s brand or are not product   class users.
  • Price switchers: Those who are price switchers.
  • The passively loyal: Those who buy out of habit rather than reason.
  • Fence sitters: those who are indifferent between two or more brands. ( these guys sit on the fence and watch – not bothered )
  • The committed: those who are committed to our brands.  (Hard Core Loyal Customers ! These guys are brands Asset ! 🙂 )

The challenges to improve the brand’s loyalty profile are to increase the number of customers who are not price switchers, to strengthen the fence sitters and committed ties to the brand and to increase the number who would pay more to use the brand or service. Two segments where the companies generally under invest are passively loyal and the committed customers. The passively loyal customers are often taken for granted. At the other end of the spectrum are the highly loyal or committed customers. Firms also tend to take this group for granted. Yet there may be significant potential to increase business from the very loyal.

The loyal Marriott customer might be encouraged to select even more than often with a improved portfolio of business support services such as fax machines in rooms.

Further there is a risk that loyal customers can be enticed away by a competitor if the performance of the product or service is not improved. For these reasons firms should avoid diverting resources from the loyal core to the non-customers and price switchers. One approach to enhancing the loyalty of fence sitters and the committed is to develop or strengthen their relationship with the brand.

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